“Then, (Security Investors Protection Corporation) began a ‘SIPA (Security Investors Protection Act)’ liquidation of MF Global. They planned to marshal all the assets of MF Global, sell off what they could, and deal with creditor claims.

“Well, that’s very bad for commodities customers since they have no protection under the (Security Investors Protection Act) regulations. Those are for securities accounts. We don’t have any insurance – we have customer-segregated funds.

“So, all assets were frozen and nobody knew what the heck was going on.”

On the formation of the customer coalition…

“I’ve talked to people all over the country who have been affected by this: farmers, ranchers, oil and gas guys, and guys in hedge funds. Everyone’s money was frozen and no one could do anything.

“As this dragged out through the first week, it became clear that the shortfall had dropped. I believe it’s about $600 million and no one is really sure why it happened yet. Is it a trading loss? Did they move customer collateral to cover a house trade? Is there even a shortfall?

“Regardless, during that week, I got together with a couple of others through social networking. We were very concerned that no one appeared to advocating for customers as this unfolded. All the agencies that are supposed to protect customers had totally failed. The National Futures Association was doing nothing. The CFTC had basically abdicated its responsibility and authority to (the Security Investors Protection Corporation).

“The CME Group’s actions have been inexcusable during this process – they could have stopped all this from happening by simply guaranteeing whatever the shortfall. They may not have wanted to lose $600 million – but that will look like a small loss when this is all said and done.

“So, we began the Commodity Customer Coalition. It’s just a group of industry professionals along with their customers and clients. We started banging on the drum, trying to make some noise.”